Radical solutions to the Hormuz bottleneck
Every day ships carrying 16.5 million barrels of oil – almost 20% of the world’s total oil consumption – pass through the Strait of Hormuz, the narrow waterway that links the Persian Gulf to the Gulf of Oman. In the past few weeks an uncomfortable reality has been forced on the world’s attention: The rogue state of Iran has a stranglehold on this vital shipping lane, and thus on a significant proportion of the global economy.
Always aware of its potential power, Iran has from time to time chosen to demonstrate its muscle. Over the past year, in an attempt to force Iran back to the negotiating table, the US extended its sanctions, and they began to bite hard on Iran’s domestic economy. Tit-for-tat threats followed, and then action – Iran’s President Hassan Rouhani has begun openly to exceed the threshold set in the deal for enriching uranium, while the US has increased its troops and military hardware in the Persian Gulf area on three separate occasions.
Then on May 12, 2019, four commercial oil tankers anchored in UAE waters in the Strait of Hormuz were attacked and damaged. The US accused Iran. Iran denied responsibility. Exactly a month later two tankers were shelled and set on fire near the Hormuz Strait, and crews were forced
to abandon ship. US officials later released a video which they said showed Iran’s involvement. Finally, on July 19, two British-flagged oil tankers were seized by Iran’s Revolutionary Guards in the Strait of Hormuz. One was allowed to proceed; the other was hijacked and taken to the Iranian port of Bandar Abbas. Preliminary UK-Iranian diplomatic exchanges indicated that this action was taken in retaliation for the seizure by the UK a few weeks earlier of an Iranian oil tanker, the Grace 1, in Gibraltar on suspicion of breaking EU sanctions on Syria.
The Strait of Hormuz lies between the coastline of Iran and the Musandam Peninsula, a spit of land that pokes up towards the Iran but does not quite reach it. At its narrowest, the waterway is only 21 nautical miles wide. The chunk of land at the tip of Musandam belongs to Oman, although it is not contiguous with Oman proper. The region beneath this Omani exclave is the UAE.
Iran’s dominance of the Strait of Hormuz has never satisfied its arch-enemy Saudi Arabia. Back in September 2015, the Arab Century Center for Studies based in Saudi Arabia published a study that proposed constructing a 950-kilometer (590-mile) canal connecting the Persian Gulf with the Arabian Sea. The canal would run from the Saudi coast just south of Qatar and terminate on the coast of Yemen. Some 630 km. would flow through Saudi Arabia and 320 km. through Yemen, reducing by half the distance currently covered by ships passing through the Strait of Hormuz.
“It will be 150-meters wide and 25 meters deep,” said Saad bin Omar, the head of the center. “We have thought of Oman as an alternative for Yemen if that country suffers political instability.” Yemen is currently a battlefield. The alternative route would be the only practicable one.
The plans envisaged a major development of what is known as the “Empty Quarter” of Saudi Arabia. Industrial cities, residential towns, hotels and tourism resorts would be constructed along the canal’s banks, as well as projects for energy generation and water desalination.
EITHER YEMEN or Oman would similarly benefit from some 700 km. of waterfront each side of the lower end of the canal, and up to one million jobs.
Initial highly optimistic estimates for the mega-project were around $80 billion.
A major development project of this sort would fit well into the ambitious plan to revitalize the nation – Saudi Vision 2030, launched in April 2016 by Crown Prince Mohammed bin Salman. If that plan succeeds, by the time of Saudi Arabia’s centenary in 2032, the country will have been transformed from its current dependency on oil revenues into a modern, liberalized, thriving, entrepreneurial society, its prosperity underpinned by flourishing industrial, financial, economic and commercial sectors.
Bin Omar believed that the canal – its proposed name was the Salman Canal in honor of the king – could be constructed within five years. “We hope the project will be completed during his rule,” he said, but little has been heard of it in the past few years, and it does not feature in the elaborate documents that describe Saudi Vision 2030.
Blueprints for a less ambitious scheme to by-pass the Strait of Hormuz have existed for more than a decade. Back in 2008 the UAE considered a project devised by British engineers to construct a 360-km. canal across the Musandam Peninsula, south of the Omani exclave. At the time it was estimated to cost some $200 billion, given that the canal would have to cut across the Hajar Mountain range, to emerge at the oil port of Fujairah, on the east coast of the UAE. The plan envisaged recovering the cost of construction over time from charging vessels for use of the canal. After consideration the project was mothballed in favor of a 360-km.Habshan–Fujairah oil pipeline, which was started in 2008 and commissioned in 2012.
An examination of the map indicates that an even simpler and far less costly canal scheme could be effective in protecting particularly vulnerable shipping from Iranian interference. The tip of the Musandam Peninsula is Omani territory. A 60-km. canal linking the Persian Gulf with the Gulf of Oman could be constructed across this Omani exclave, and would achieve the political objective of providing an alternative route for any vessel that would prefer to by-pass the Gulf of Hormuz. It would have the additional benefit of easing the pressure of traffic on the overcrowded Hormuz route.
The shorter canals would do little to cut journey times and thus costs, but by reducing Iran’s ability to disrupt Western interests, could provide the civilized world with a political advantage.
The longer proposed “Salman Canal” would indeed offer a much faster route for the world’s shipping between the Persian Gulf and the Indian Ocean, and could make a positive contribution towards reducing oil prices worldwide. Given Iran’s much more aggressive stance in the Strait of Hormuz recently, perhaps the time has come for some lateral thinking. If Saudi Arabia took those plans out of storage and dusted them off, it might be surprised at the support it receives from the rest of the world.
The writer is Middle East correspondent for Eurasia Review. His latest book is The Chaos in the Middle East: 2014-2016. He blogs at a-mid-east-journal.blogspot.com.